Gamification in Grocery: Boosting Engagement With Caper Carts
David McIntosh, the Chief Connected Stores Officer at Instacart, joins Chris Walton and Anne Mezzenga to discuss the innovative solutions Instacart is implementing to create a connected store experience.
McIntosh explains how the connected store initiative aims to bridge the gap between online and in-store shopping by leveraging technology, such as AI-powered smart carts and digital solutions that enhance customer engagement and streamline operations for retailers.
The conversation delves into the importance of screens and sensors in delivering delightful shopping experiences, highlighting how these tools can drive customer loyalty and improve revenue streams for grocery stores. They explore the gamification features of the Caper cart, which encourage customer interaction and make shopping more enjoyable. Overall, the episode emphasizes the transformative potential of technology in the grocery industry and the necessity of aligning solutions with both consumer needs and retailer capabilities.
Takeaways:
- David McIntosh, the Chief Connected Stores Officer at Instacart, discusses his role and the concept of connected stores.
- Instacart's connected store solutions aim to enhance the in-store shopping experience by integrating digital technologies.
- Gamification features in the Caper cart are designed to engage families and encourage more interactive shopping.
- The importance of having a digitally enabled screen and sensors in the connected storefront for real-time consumer engagement is emphasized.
- Retailers have seen significant basket lifts and increased consumer engagement through Instacart's innovative technology solutions.
- Successful adoption of the Caper carts relies on ensuring they are consistently available and charged in stores.
This podcast uses the following third-party services for analysis:
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Transcript
Hello, everyone, this is Omnitalk Retail.
Chris Walton:I'm Chris Walton.
Ann Mazinga:And I'm Ann Mazinga.
Chris Walton:And we are here kicking off day two of grocery shop from the fusion group's booth, Booth a 210.
Chris Walton:And Ann.
Chris Walton:Yes, standing between us is a man named David McIntosh, who happens to be the chief connected stores officer at Instacart.
Chris Walton:David, welcome to Omnitalk.
David McIntosh:Thank you for having me.
Ann Mazinga:Yeah, we're excited to have you.
Ann Mazinga:There's been a lot of Instacart announcements, I feel like since we stepped foot in Las Vegas especially, but I'd love to start by just giving the audience a little bit of your role and what chief connected stores officer means.
Ann Mazinga:Exactly what are you doing in your day to day and a little bit about your background.
David McIntosh:Yeah, happy to share.
David McIntosh:So connected store at Instacart is a full suite of solutions that we have to really bring retailers online and digitize their business.
David McIntosh:And the inspiration for connected store really came at the center of two insights.
David McIntosh:Okay, so one, a lot of our users, our customers online were saying, hey, Instacart, I love the convenience and the personalization of delivery, but I also shop in store.
David McIntosh:Yeah, can you Instacart, help me take what I love about online and bring it in the store?
David McIntosh:And then our retailer partners were also coming to us saying, hey, Instacart, you've helped me, bring me online.
David McIntosh:So if you look at the Instacart business, we not only operate a marketplace, but operate products like Storefront Pro and connect that help retailers like Sprouts and Wegmans and Costco bring their businesses online.
David McIntosh:And so a lot of our retailer partners have very deep relationships with us and we're saying, look, Instacart, you've brought my business online.
David McIntosh:Can you help me digitize my store?
David McIntosh:How can I drive higher penetration of my loyalty programs in store?
David McIntosh:How can I digitize my customer bases in store?
David McIntosh:How can I unlock new revenue streams on store in store?
David McIntosh:And so connected store really sits at the intersection of both those consumer insights and those retailer insights.
David McIntosh:And we operate a full suite of technology.
David McIntosh:So caper, which I just showed, demo AI powered smart cart foodstorm, which digitizes the deli.
David McIntosh:We have a product called carrot tags, which is actually a software layer on top of electronic shelf labels like fusions.
David McIntosh:We have in store mode, which helps people plan a trip to the store and a variety of other technologies that digitize the store.
Chris Walton:So, David, I'm curious, so are you kind of a one of one, like a connected stores officer?
Chris Walton:Like, I don't know of that title anywhere else?
Chris Walton:Are you the only one that has that title?
David McIntosh:Good question.
Chris Walton:In the industry here at grocery shop, you very well might be right.
David McIntosh:Yeah, perhaps.
David McIntosh:I mean, I think Instacart is unique in that it both has a scaled online business.
Chris Walton:Right.
David McIntosh:And is investing in store and really bridging the two together.
David McIntosh:And that was sort of another thesis of connected store, which is, how do you unify the experience?
David McIntosh:Right.
David McIntosh:And so our vision is really on a five year horizon.
David McIntosh:Customers don't have to choose between shopping in store online.
David McIntosh:It's one unified mode powered by Instacart.
Chris Walton:It's kind of been one of the key themes of this conference already, too.
Chris Walton:So I'm curious.
Chris Walton:So as you think, because as you think of that, I mean, you're kind of blazing new trails in a lot of ways here for the industry, and you mentioned some of the solutions that you're providing to the grocers, and we want to talk about those more, too.
Chris Walton:But as you step back from it, take a 30,000 foot view for our audience.
Chris Walton:What are some of the areas of impact that you think are most important to create that connected store of the future?
David McIntosh:Yeah, a couple things, I think.
David McIntosh:One from our perspective is it starts with a screen that's digitally enabled.
Chris Walton:Okay?
David McIntosh:If you've got a screen in front of a customer that they're engaged with, that's where you can start to deliver these moments of delight.
Chris Walton:Okay?
Chris Walton:So our announcement, that's a necessary condition.
Chris Walton:The screen.
David McIntosh:You need.
David McIntosh:You need the screen.
Chris Walton:Okay.
David McIntosh:And then second, from our perspective, you need sensors.
David McIntosh:So if you think about the caper cart, there's not only camera sensors on the cart that sense what you're putting into the cart, but there's also a digital scale, a way to measure certified sensor.
David McIntosh:There's a location sensor.
David McIntosh:And so, really, our thesis is it's the combination of these sensors combined with the screen that allows you to unlock these new experiences in the store that are incremental to cpgs, to retailers, and to consumers.
Chris Walton:Well said.
Chris Walton:That's.
Chris Walton:Well said.
Ann Mazinga:And let's dive into the capercare a little bit more, because as I alluded to earlier, you announced gamification happening on these cards, but let's talk about kind of everything that's possible now with the caper card, if you don't mind.
David McIntosh:Yeah, yeah.
David McIntosh:Happy to.
David McIntosh:Excited for the announcement that we have, and it really leans into existing behavior we were seeing.
David McIntosh:When I went to users in the store, I was telling this to Chris earlier, and I asked them why are you using kpop?
David McIntosh:I think there's a little bit of a misconception that it's all about skip the line.
David McIntosh:It's all about fast tracking users.
Ann Mazinga:You mean the consumers shopping with the cards?
David McIntosh:Exactly.
Ann Mazinga:Okay.
David McIntosh:Consumers shopping with caper.
David McIntosh:And when I talk to users, they're saying, hey, I love the ability to track my total.
David McIntosh:Okay, I want to.
David McIntosh:Caper helps me save money, the running total, the coupons, the discounts.
David McIntosh:And of course, customers like bag as you go.
David McIntosh:They like the seamlessness, but it's really capabilities rooted in the screen.
David McIntosh:And when I observed customers using Capr, I often saw kids drag their parents to the cart and say, let me scan.
David McIntosh:And so what we saw is that caper was really becoming an adventure for families and couples shopping.
David McIntosh:Their words, not mine, by the way, the word adventure.
David McIntosh:And so with the announcement around gamification, we're really leaning into that core customer behavior, and we're enabling things like streaks, which are sort of allowing retailers and cpgs to reward certain behaviors in the store.
David McIntosh:Most like little mini games that customers can do.
David McIntosh:We have capabilities like spin to win, which I think you used, Chris, earlier.
David McIntosh:You can actually spin a spinner.
David McIntosh:Right.
David McIntosh:And it's things like that that really lean into making the grocery experience more delightful, more fun, while also driving incremental value to cpgs, because they can sort of shake customers out of autopilot and participate in this ecosystem and offer new rewards to customers.
Ann Mazinga:Yeah, David, I know it's great for the.
Ann Mazinga:The retailers, the grocers who are using these cards.
Ann Mazinga:I have one question specifically around, like, the hurdle of getting people to use them for the first time.
Ann Mazinga:But what we've heard from retailers who we've interviewed who are using them in store now is that once people use them, they love them and they only want to use them.
Ann Mazinga:How do you think about talking to your retail partners about how to get people, their customers over that initial hurdle of doing that?
Ann Mazinga:And is gamification in a way that you think is going to help them do that?
David McIntosh:Absolutely.
David McIntosh:A great question.
David McIntosh:100%.
David McIntosh:Gamification is part of the formula.
Ann Mazinga:Okay.
David McIntosh:I will tell you that what we're also seeing, I shared this data point with, with Chris earlier.
David McIntosh:We announced in prior earnings that within the first couple weeks of launch, we saw, you know, on a peak day, 10% of in store dollar volume through flow through these.
David McIntosh:These ten caper carts we had in the store out of hundreds of carts.
David McIntosh:So we are seeing that natural consumer adoption.
David McIntosh:I think there's a couple of things that are critical so one is, it sounds obvious, but the carts have to be available and charged.
David McIntosh:And so things that we've built, like stackable charging, where the carts just nest into each other to charge, seem subtle, but are a big deal, because if you don't have that, then staff have to plug in each, chart, each cart individually, which becomes a huge burden.
David McIntosh:Inevitably, people forget to do it.
David McIntosh:And so things like that stackable charging functionality make sure they're consistently available for customers, which sort of sits at the very base of the pyramid.
David McIntosh:You need them to be consistently available for customers to use it.
David McIntosh:Another element is the carts have to be in the same areas, the traditional carts.
David McIntosh:Again, it sounds obvious, but it's one of those things where when customers see it, it can't be in a back room somewhere that they have to drag.
David McIntosh:They have to be next to the traditional carts.
David McIntosh:And so things, again, like the stackable charging, the fixed charger.
David McIntosh:You made this observation earlier, Kristen.
David McIntosh:If they don't stack into each other, where do you put them?
Chris Walton:You can't.
Chris Walton:Yeah, right.
Chris Walton:You have to think about that.
David McIntosh:They have to fit into the retailer mind.
David McIntosh:And then to your point, what we're already seeing is customers love the gamification capabilities, the value capabilities.
David McIntosh:We hear from customers that a friend told them about the fact that they can do spin to win in a store, that they can play these gamification capabilities in the store.
David McIntosh:And so you sort of see caper go viral within a community in some cases.
David McIntosh:When we launch, we've even seen a line to use the caper carts in the store right after launch.
David McIntosh:And so there is that consumer pull that we're seeing in the market.
David McIntosh:And then I think the final thing that I would say on this front, again, it seems obvious, but the carts have to be generally available when customers are shopping the store.
David McIntosh: to start service of caper at: David McIntosh: or: David McIntosh: until maybe: David McIntosh:because it's a new technology.
David McIntosh:But what they often see is that customers will then complain.
David McIntosh:I heard about this actually yesterday, where our customer will say, hey, look, why can't I use it?
David McIntosh: d it yesterday at, let's say,: David McIntosh: i'm now in the store at: David McIntosh:it's that consistency that builds that habituation.
David McIntosh:And so then it's things like the fact that the carts are able to be charged with sackable charging.
David McIntosh:It's things like that.
David McIntosh:We call it caper Cloud, the tooling that we make available to retailers to manage the carts easily.
David McIntosh:Those things account sounds subtle, but have a really big impact on making sure the basics are there.
Chris Walton:I.
David McIntosh:Which is the carts are available for customers to use it consistently, which you then can stack some of the other capabilities like gamification on top to further drive adoption.
Chris Walton:David, I'm curious just to go a little bit further and maybe even put you on the spot a little bit, too.
Chris Walton:So do you have any statistics that tell.
Chris Walton:Tell us or tell our audience where the customer adoption actually is right now in terms of usage rates or anything of that nature?
David McIntosh:Yeah, I think in terms of overall adoption, the best stat is that within a couple weeks of launch at a schnuck store, we got to 10% dollars peak going through just ten carts in the store out of 100.
David McIntosh:And the reason 10% matters, by the way, is because if you think about online grocery, it took online grocery a decade to get there.
David McIntosh:So that's really exciting.
David McIntosh:I think the other thing that is exciting is that in one retailer, we're seeing more than 40% of orders have coupons associated with that.
David McIntosh:People are actively clipping coupons.
David McIntosh:And so it gives you a sense of the depth of interaction people have with that screen.
David McIntosh:And the fact that couponing value is a really big part of the overall proposition.
Chris Walton:Right.
Chris Walton:Which is a.
Chris Walton:Which is a big deal for the CPG, is because of the measurement that comes with it, by way of the sensors that you talked about in the beginning.
Chris Walton:The other unlock for me in this conversation today, and even at this, this show, too, is.
Chris Walton:Is what you said that I want to make sure the audience heard, too, is it's less about the just walk out idea.
Chris Walton:Right.
Chris Walton:It's less about the cashier, less shopping experience, and it's more about the better experience by way of couponing, by way of knowing the budget that you're spending in real time as you're shopping, that's a big unlock, which I think initially that was not how these things were sold.
Chris Walton:Right?
David McIntosh:That's absolutely right.
David McIntosh:When you heard me go to market with this product, and we think we put our first card in store maybe a little bit more than a year ago, the new model three, I'm talking about, you know, our pitch was very much, this is about skip the line, right?
David McIntosh:This is about, you know, getting customers out of the store faster, alleviating lines in the store.
David McIntosh:And to be clear, customers still value that.
David McIntosh:That's a thing.
David McIntosh:But when you talk to customers and you ask them, hey, why are you using this more often?
David McIntosh:Not, it's, I want to track my total.
David McIntosh:I want a budget.
David McIntosh:I love the couponing.
David McIntosh:I love the gamification.
David McIntosh:I love bag as you go.
David McIntosh:It's more seamless.
David McIntosh:And of course, skip the line.
David McIntosh:Seamlessness is in that list of the top five.
David McIntosh:But really, what we're seeing is it's the screen, it's the engaging screen.
David McIntosh:That's the unlock here.
David McIntosh:And then when you pair that screen with the sensors on the cart, location based sensors, the camera sensors, the weights and measure sensors, that's where you can create the win win for cpgs, for retailers, and for the consumer.
Chris Walton:Okay, so let's get you out here on this.
Chris Walton:So putting our store of the future hat on, or our connected store of the future hat on, however we want to, whatever moniker we want to use, a grocery store is a really complicated operation.
Chris Walton:Right.
Chris Walton:And you guys have a solution in a number of areas, but there are so many more areas that you could, quote, unquote, connect.
David McIntosh:Yeah.
Chris Walton:How do you create the roadmap in your role and decide where to go next?
David McIntosh:Yeah, that's a great question.
David McIntosh:I will tell you what we did for connected stores.
David McIntosh:We just started with, what are our retailers saying and what are our consumers saying?
David McIntosh:And that helped us stack rank the list of priorities in the store.
David McIntosh:And we also look for areas where we already have an existing ecosystem.
David McIntosh:So one example is, if you look at our carrot tags ecosystem, we activated pictilite.
David McIntosh:And so pick to light is available chain wide at all these stores in the US.
David McIntosh:So anytime an Instacart shopper goes in an Aldi store, they can tap a button on the shopper app and actually activate the tag.
David McIntosh:And that improves the order quality, the found rate, the efficiency.
David McIntosh:And so that was something extended out of the fact that we already have a highly engaged, scaled shopper base.
David McIntosh:And we said, how can we digitize the store in a way that makes life easier for the shoppers going into the store?
David McIntosh:You know, another example was the food storm acquisition that really evolved organically out of, you know, an understanding that for a lot of our retailers, they were struggling with prepared food.
David McIntosh:They wanted a better solution to manage prepared food.
David McIntosh:So much of the deli today is still pen and paper, which leads to order, you know, inaccuracy.
David McIntosh:As you were saying earlier, you got.
Chris Walton:To speak in my language on this one.
David McIntosh:You got to stand in line.
David McIntosh:Right?
David McIntosh:Like, nobody wants to stand in line at the deli.
David McIntosh:And so really, what we look for is where there are existing pain points from our customers, from our retailers.
David McIntosh:And then on top of that, as you saw with Caper earlier, we're now really connecting these solutions.
David McIntosh:You can sort of think about, caper is this digital hub that we're bringing to the store, and we say, okay, well, now that a customer's engaged with the screen, they're putting in their loyalty.
David McIntosh:Maybe they want to take their shopping list that they built online, or maybe they just want to take what they bought online and sync it to the cart so they can easily shop it.
David McIntosh:Right.
David McIntosh:Now that they're using the cart, maybe they want to activate the tags in the store so they can more easily find something.
David McIntosh:Now that they've got the screen in front of them, maybe they want to put an order in front of the deli.
David McIntosh:And so, at a high level, we're really thinking about, what are the moments throughout the store where a consumer has problems that can be solved with diffusion of a screen and digital sensors on the cart?
Chris Walton:The consumers and the associates, too.
Chris Walton:Right.
Chris Walton:So the screen and the sensors applies to both, if I'm hearing you right, right.
David McIntosh:That's 100% right.
David McIntosh:To make this work, you've got to think about all the stakeholders.
David McIntosh:You've got to think about the users.
David McIntosh:You've got to think about the retailers.
David McIntosh:Right.
David McIntosh:And that's where things like, you know, we announced previously that, you know, retailers are seeing significant basket lifts from caper.
David McIntosh:You got to think about the cpgs.
David McIntosh:How do you let cpgs participate in a new way?
David McIntosh:And then finally, you have to think about cbgs.
David McIntosh:Get the screens, too, the associates.
David McIntosh:It's got to be a win win win for all four.
Ann Mazinga:Well, David, I have to thank you for giving us so much of your time today for the tour of the caper cart, which Chris will be filling us all in on later.
Chris Walton:Yeah, we got to stop by there later and give you a look at that.
Chris Walton:It's pretty slick.
Ann Mazinga:Yeah.
Ann Mazinga:Thank you so much to the fusion group for making all of our grocery shop coverage possible today.
Ann Mazinga:We are going to be here all day today in Booth a 210, so thank you again to them.
Ann Mazinga:Thanks to David McIntosh of Instacart.
Ann Mazinga:And until next time, be careful out there.
